If you are considering a visit to a bankruptcy attorney in the run-up to the New Year, it’s important to understand how the holidays can affect your filing. Exactly when you file can impact what type of bankruptcy you are eligible for. Find out what you should know before filing any paperwork.

When Should You File for Bankruptcy?

There are two main types of private bankruptcy, Chapter 7 and Chapter 13. With Chapter 7, most of your debts are discharged within a matter of months—however, your assets may be seized and liquidated to pay off creditors. Chapter 13 does a better job of safeguarding your assets but requires you to make payments for a number of years before your debts will be discharged.

To qualify for Chapter 7 bankruptcy, your annual income can’t exceed a certain threshold. To determine this, a “means test” is used to examine your financial history during the last six full calendar months before the date of filing, including everything from the money you earned to the cash gifts and bonuses you received. 

So, if you file on December 27, for instance, your Christmas bonus won’t be included in the means test, while everything from June through November will. If you want to qualify for Chapter 7, a bonus or cash gift given during the holidays—even money from friends or family counts—could jeopardize this. Make sure to file before year’s end.

How Can You Enjoy The Holidays With Bankruptcy Looming?

Filing for bankruptcy can put a damper on your holiday spirit, but you can still enjoy the season with your loved ones. Draw up a budget, considering what’s most important to you. Maybe you’d rather forego a fancy dinner and instead, keep your Christmas tree. 

Meanwhile, let your bankruptcy attorney focus on preparing the correct paperwork to get your filing done by the needed deadline. Remember that going through a less extravagant season now, means better financial health in the future.

Need a bankruptcy attorney? You can trust the experienced bankruptcy lawyers at O'Neill Law Firm LLC, located in La Crosse County, WI. With over 20 years in the business, these professionals have the knowledge needed to guide you through the intricacies of the legal world. Whether you need a bankruptcy lawyer or a DUI attorney, they have the right professional to protect your interests. They also have deep roots in the community, as their online list of social initiatives shows. For an appointment with a bankruptcy attorney, call (608) 519-3551.